Tuesday, January 6, 2009

March 2004: Letter from Buenos Aires

The very name, Buenos Aires, good view or good air, evokes something different from any city in the rest of the Americas. Buenos Aires is more European in manner, style, and architecture than any metropolis in the Western Hemisphere. While it is certainly a modern city, one can see and feel a direct link to the Buenos Aires of the 1940's and 50's, the days of Juan and Eva Peron. Buenos Aires has a real feel of historical continuity to it. For me, it is one of the great cities of the world. The main part of the city, Capital Federal, has a population of three million people, but Gran Buenos Aires has grown to thirteen million.

Everyone else in Latin America makes jokes about the Argentineans, mostly about the Argentineans from Buenos Aires, known as Porteñas. The Porteñas are fiercely proud of their city, their culture and their European style. The large proportion of the population is Spanish or Italian with many having dual citizenships. They truly see themselves as European more so than Latin Americans. The Porteñas have a reputation throughout the all of Latin America of telling everyone at anytime and anyplace just how much better this or that is in Buenos Aires. There are numerous jokes about this. The one I remember and is most telling of how the rest of the Latins view Argentineans is the following: "What is the definition of ego? Ego is that little Argentinean inside of each of us."

Buenos Aires is known as the City of Cupolas. Most of the older, corner, buildings have cupolas. These buildings remind me of France mostly because of the way the walls curve and merge into the roof. The cupolas are small and modest to larger and ornate. In my first trips to Buenos Aires, I never noticed the predominance of cupolas. Once I heard someone say that Buenos Aires was the City of Cupolas, I started to notice and appreciate them. There are many post card and coffee table books of the Cupolas of Buenos Aires.

The cars in Buenos Aires are definitely European. You see more French cars in Buenos Aires than anyplace outside of France that I know of. I have never seen so many Peugeots and Renaults. There are, of course Fiats as well, but surprisingly few American or Japanese cars. In the European style, the cars are smaller and rarely does one see an SUV, the likes of which clog our roads. There are no Toyotas but one sees the occasional Honda or Mazda. There are Fords, but they are the European models, Sierras and Galaxies. Amazingly, the pick-up trucks are all vintage 1970s and 80s US Chevys and Fords in a variety of conditions from pristine to being held together with Bondo. There are also a fair number of Ford Falcons, Robert McNamara's car of the people. Ford produced this car in Argentina well beyond the US production run. These Falcons were all in a states of disrepair, showing their age, but still running. They caught my eye because it was our family car in early 1960s and my maternal grandmother also drove one into the 1970s.

While admittedly being a great generalization, there seem to be two styles of dress in Buenos Aires. People seem to be clad in jeans with loose fitting peasant or tee shirts or they are dressed in a conservative and classy European style. The dress down casual folks have the coolest shirts, jerseys, tunics or whatever you call them. The sleeves and tails are flared, the colors muted and materials are like home weave cotton. Among the causal Argentineans, a disproportionate number of the men, compared to what I notice elsewhere, have long layered hair with a wind blown look. I believe, whether they admit or not, that this hair style is adopted from the great Argentine soccer player, Alberto Diego Maradona. For the class of well heeled Porteñas, they match up with the best of New York, Paris, Milan or Tokyo. They dress classic and continental, the men are refined and the women elegant.

The sky in Buenos Aires is blue, the same color as Celeste blue of their flag. It seems to be a paler blue then that I am used to in North America. Maybe this is because we are so far south of the equator, the angle of the sun, or having something to do with the hole in the ozone layer over Antarctica. More likely, it is my imagination. But to me, the sky is different blue here. There is something to hole in the layer however, many people commented on how quickly one can burn if not protected compared to twenty or thirty years ago.

I took a tour of the city on Saturday, March 21. I was sitting on a bus with people from all over the world. I sat across from two ladies from Australia. Then had been to Santiago, Chile and were going to Natal, Brazil after their time in Buenos Aires. They did not like Santiago at all and were not impressed with Buenos Aires either. They could not relate to any of the talk of the European style of the city. They knew both Paris and London well, they claimed, and saw Santiago as an air polluted city and Buenos Aires as dirty. When I left Argentina that evening to go to Miami en route to Mexico City, I sat next to a fellow from Kansas City who runs a travel agency. He just led a cruise ship tour that began in Santiago and ended in Buenos Aires. His perspective was completely different and he really liked both cities. He told me that Buenos Aires has more pre-World War II European architecture than many places in Europe where the buildings were razed during the war.

The Argentines relate more to Europe then to the any place else. In fact, after the horrible devaluation a few years ago that brought the economy to its knees, many people left Argentina to return to Spain or Italy. Many Argentineans kept their European citizenships and passports active even though their families may have been in Argentina for two or three generations. My Colgate friends and colleagues in Buenos Aires do not think very much of those who left.
The economic crisis of 2002 was devastating to Argentina. Before 2002, their economy was dollarized i.e. 1 peso equaled 1 dollar. The economy, however, showed signs of strain and weakness. Industry was leaving at a rapid rate to Brazil and China. It was costly and inefficient to do business in Argentina. The government tried several measures to avoid abandoning the dollar and devaluating the peso. The only thing in common with all of these measures was that none of them worked. When the devaluation finally came in January of 2002, the exchange rate went, overnight, to 4 pesos to the dollar. Whether you believed the Argentines to be an arrogant lot or not, the devaluation had a noticeable effect on making everyone sadder and more humble. It was noticeable and sudden; you could see and sense it. You could not help but sympathize with their plight.

Today, the exchange rate is 2.8 pesos to the dollar. The economy has come back a bit due primarily to Argentina having become a lower cost provider. At the end of 2003, due to record exports, economic output grew 5.5%, inflation and unemployment both dropped. There is activity in Buenos Aires, people are working, and the city mostly looks like it did before the crisis. The real difference I could see, other than the buying power of the dollar, is that there is a lot more people living on the streets. There are beggars and the entire litany of stop light entrepreneurs: window washers, jugglers and people selling a variety of goods. Unfortunately and sadly, there were a noticeable number of prostitutes, even soliciting during the day time hours. You never saw them in Buenos Aires before the crisis.

The grand downtown shopping malls, Bullrich and Galeria Pacifica, are works of art. The buildings are ornate and grand, again in the European style. Both malls were full of people, but as the local joke goes, since the crisis the Argentineans only go to the malls to look. The only real bargain I saw was La Coste products, those shirts with the little alligator logo. La Coste products are produced in Argentina and even in the La Coste store in Galeria Pacifica, cost half of what the list price is in the US. Everything else cost the same. In fact, the Ralph Lauren Polo shop priced their goods in US Dollars.

Leather goods were abundant, and now reasonably priced. There are so called leather shops or factories on Florida Street, a shopping promenade closed to automobiles. I wandered into the shop where I bought a leather jacket before the crisis. The prices were half of what I paid, but they would not consider a rebate. A clever salesman told me to buy another jacket with the result of having a net savings of 25% on both jackets. Even with leather goods, you can find similar prices and quality in the US with the recent flood of goods from China. In fact, with the globalization of brands, it is very difficult to find great deals internationally.
Dining out is another matter. Before the economic crisis, restaurants in Buenos Aires had the equivalent quality and prices to rival New York and Paris. The quality has not suffered, but the prices are now very reasonable. Argentina is known for great local wines, excellent Italian restaurants and fantastic Parillas or meat grills. Argentine beef is world famous. The beef is range or grass fed vs. corn fed in feed lots like in the US. Corn is not a natural feed for cattle. Corn changes the acidity levels in the digestive tract of cattle which is responsible for the acid resistant e. coli that is prevalent in our food supply. The beef in Argentina is better and tastier. The cuts are beyond generous, they are huge. I recall ordering baby beef one night, somehow thinking baby beef equated to a small portion. I was served what I can only describe as a football sized filet that after a half hour of eating still looked the same size. The dinner hour is much later than most Americans are used to. The Argentineans follow the Spanish model. No one thinks about eating dinner much before 10 p.m. and then they will eat half a cow.

Enjoying a great cup of coffee is no problem. There are cafes and shops everywhere. The espressos and cappuccinos, in the European tradition, are great, the service fast, and very cheap even by local standards. If you are looking for a Starbucks or want one of their high calorie, high priced exotic concoctions, you are out of luck. There were no Starbucks that I saw in Buenos Aires. The Argentine Coffee Shop chain was called Havanna. Beyond the coffee shops, Havanna is known for their baked goods, obleas or cookies of dolce de leche. The Havanna shops offer coffee, sandwiches and sweets. An espresso cost 1 peso (thirty some cents!) and is served to your table by a waiter.

My company, Colgate-Palmolive, had bought a local Argentine consumer products company in the late 1990s. We bought it primarily for their toothpaste brand, Odol, which was also the name of the company. With the brand, we got a factory and warehouse complex in a region of Buenos Aires called Floresta. As with many acquisitions, the way to make money on the deal was to consolidate production and merge functions i.e. close factories and reduce redundant headcount. We did that. We closed the Odol factory and laid off most of their people.

As we were trying to sell the Floresta property, the empty space was used, as often happens with any excess industrial space, as an overflow warehouse for both raw materials and finished goods. The term “overflow warehouse” is a dirty word in logistics implying poor inventory management and adding significantly to operational costs, so I wanted to see the space and determine why we were using it and how quickly we could stop using it as a warehouse. So we went to Floresta to see the facility.

It was a beautiful sunny fall afternoon. As we drove on the main avenue in Floresta, I felt like we were in a time warp. I was reminded of main streets in the US of the 1950s and 1960s. There were numerous sole proprietor shops selling specialty items. One sold just lamps, another just mirrors, others sold leather accessories. There were little shops of every kind. None of them were doing any business. Many of the men, I presumed the owners, were standing in their doorways enjoying the sunny Tuesday afternoon. Some were talking with their neighbors. It reminded me of the retail business environment that once was here in the US and that gradually disappeared with the emergence of the national chain stores like Wal-Mart and so called category killers like Home Depot and Bed, Bath and Beyond that have become part of our national landscape. I knew that Carrefours, the French retail giant and number two in the world, and Wal-Mart were moving into Buenos Aires in a big way. I could not help but think the days of these shops were numbered. I am sure the crisis wiped them out.

The map is from CIA World Factbook where you can find more information on Argentina

1 comment:

  1. I now can make an idea of where Im going!!
    I´ll rent an apartment in Buenos Aires, in Recoleta, a neighborhood that has a lot of history. I wanna know about the history and facts of the city. Nice info here!!